Hindenburg Fallout: Fresh Plea in SC Wants SEBI to Conclude Pending Probes Against Adani Group

A fresh plea has been filed in the Supreme Court seeking a direction to SEBI for speedy conclusion of its investigation in two pending cases related to allegations of stock price manipulation by the Adani group.

The petitioner has claimed that the fresh report of US short-seller Hindenburg Research against SEBI chairperson Madhabi Buch alleging that she and her husband had stakes in obscure offshore funds used in the alleged Adani money siphoning scandal has created an "atmosphere of doubt" in the minds of the general public and investors.

Vishal Tiwari was one of the petitioners before the top court in 2023 and had sought a probe into the allegations of stock price manipulation by the Adani group.

On January 3, in a significant win for the group, the top court had refused to transfer the probe into allegations of stock price manipulation by it to a special investigation team or the Central Bureau of Investigation (CBI), saying the market regulator was carrying out a "comprehensive investigation" and its conduct "inspires confidence".

In his fresh application, Tiwari challenged an order of the Supreme Court registrar of August 5 refusing to register his plea for expeditious completion of the pending investigation by SEBI in two cases related to the allegations levelled against the Adani group.

Read: Hindenburg 2.0: From Adani to SEBI, Here's a Timeline of What has Happened So Far

Referring to the latest Hindenburg report, Tiwari said, "...the SEBI chief has denied these allegations as baseless and this court also held that third party reports cannot be considered. But this all has created an atmosphere of doubt in the minds of public and investors and in such circumstances, it becomes incumbent for SEBI to conclude the pending investigations and declare the conclusion of the investigations."

He added, "The report cited whistleblower documents. The report comes a year and a half after its damaging report on the Adani Group that had far-reaching consequences, including the cancellation of the company's flagship Rs 20,000 crore follow-on public offer".

After the Hindenburg report was published, Madhabi Buch and her husband Dhaval Buch in a joint statement strongly denied the "baseless allegations and insinuations made in the report".

The same, they asserted, "Are devoid of any truth".

In his application, Tiwari told the top court that it is in public interest and the interest of the investors who lost their funds after the publication of the Hindenburg report in 2023 to know about the investigations led by SEBI and its conclusions.

Tiwari contended that by refusing to register his plea on the grounds of "no reasonable cause for registration", the registrar has virtually suspended his fundamental right and has closed the door of the apex court for the petitioner forever.

"This court has clearly fixed the timeline of three months for the completion of investigations by the SEBI. By using the word "preferably" it cannot be understood that no timeline was fixed. When specifically three months have been mentioned in the order, it is sufficient to be understood as prudent that a fixed time period is laid down for the completion of the pending investigations," his application said.

Referring to the August 10 report of Hindenburg Research, Tiwari said it alleged that the current chairperson of the Securities and Exchange Board of India (SEBI), and her husband had stakes in offshore funds linked to the Adani Group's alleged money siphoning scandal.

Tiwari submitted that dismissal of a plea filed by another petitioner seeking review of the January 3 verdict will have no bearing on the present application as he has not sought the review of the order nor has he challenged the same.

"The nature and grounds of review petition…were totally different from the present miscellaneous application filed by the petitioner herein for the compliance of the order dated January 3, 2024," his application said.

On January 3, the top court held that the power of the court to enter the regulatory domain of SEBI in framing delegated legislation was limited and directed the market regulator to complete the two pending investigations expeditiously, preferably within three months.

A bench headed by Chief Justice D Y Chandrachud had said reliance placed by the petitioners on newspaper articles or reports by third-party organisations like Organised Crime and Corruption Reporting Project (OCCRP) to question a comprehensive investigation by a specialised regulator does not inspire confidence.

It had noted that SEBI has completed 22 out of the 24 investigations into allegations levelled against the Adani Group.

The apex court had delivered its verdict on a batch of petitions on the Adani-Hindenburg Research row over allegations of stock price manipulation by the Indian business conglomerate.

The Adani Group had dismissed the charges as lies, saying it complies with all laws and disclosure requirements.